Superior Bank signs agreement with regulators

Birmingham-based Superior Bancorp. said today its has agreed with regulators who want the bank to reform lending practices and strengthen its financial condition.

The company said it has entered into a "stipulation and consent to the issuance of an order to cease and desist" with the Office of Thrift Supervision. It requires the bank to take corrective actions to address a number of problems.

"Superior has been working closely with its regulators since the start of this economic recession to increase capital, reduce higher risk and non-performing loans, return to profitability and maintain safe and sound banking practices," CEO Stan Bailey said in a statement. "These agreements formalize steps that already are underway and that we and our regulators believe are necessary to improve Superior's financial health."

Under the agreements, Superior is required to increase capital, maintain loss reserves, stop making some types of loans and increase management and board oversight.

Superior has 45 branches in Alabama and 28 in Florida. The company had second-quarter loss of $53.7 million, compared to $5.6 million a year earlier. Loans not being paid as agreed rose to 10.95 percent of total loans, from 6.3 percent, a year earlier.

The stock has fallen 98 percent since November 2005, and closed Thursday at 72 cents.